ceb financial services technology summit...

#CEBSUMMIT

CEB Financial Services Technology Summit ’14The Realization of Service22–24 April 2014

The Keys to Optimizing Customer RelationshipsSteven Murphy, Research Director, CEBMichael Frederick, COO, ATB Financial Services

CEB TowerGroupTM Commercial Banking

#CEBTG13#CEBSUMMIT© 2014 CEB. All Rights Reserved. CMBO8231314SYN 2

A UBIQUITOUS PRIORITY CEB TowerGroup Customer Experience Top 10 Initiatives 2014

Source: CEB analysis.

Practice Area Description

Capital Markets Empower line of business with self-service information access.

Commercial Banking Enhance the client experience to improve customer satisfaction and retention.

Insurance Optimize the value of CRM across diverse distribution channels to improve sales and service quality.

Retail Banking Improve digital service and support to deepen customer engagement.

Wealth Management Combine content management, e-signature, and business process management tools for enhanced client onboarding.


SERVICE QUALITY A TOP DIFFERENTIATORQ: What Are the Top Two Differentiators That Distinguish Your Company’s Services to Corporate and Correspondent Bank Clients?

n = 1,030.

Source: CEB 2014 Technology Adoption and Investment Survey.

Quality of Service and Relationship Management

Breadth of Financial Services Offering

Quality and Variety of Channel Offerings

Expertise and/or Specializations in Specific Industries

Price of Products and Services

Small Business Product Offering

Large Corporate Product Offering

Geographical Support for Customers

0% 25% 50%

46%

31%

25%

22%

19%

18%

17%

16%


USING DATA TO IMPROVE SERVICEWhich Are the Top Two Outcomes That Your Company Expects to Improve with a Data Management Strategy?

n = 1,036.

Source: CEB 2014 Technology Adoption and Investment Survey.

Provide Customers

with Improved Service

Lower Costs

Generate Business Metrics

and Improve Reporting

Improve Sales to Existing

Clients

Attract New Clients

Improve Customer Retention

0%

20%

40%

0%

20%

40%36% 36%

34%

29% 28% 28%


0%

25%

50%

0%

25%

50%

13%

46%

33%

8%

EXECUTIVES ARE ON BOARD High Value Assigned to Commercial Onboarding Initiatives

Very High Priority

Highly Automated and Continue to

Maintain/Improve

High Priority

Automation Initiative Active

Medium Priority

Automation Initiative Planned Next 18 Months

Low Priority

Not Planned

n = 24.

Source: CEB 2013 Automated Onboarding Survey.

Fifty-nine percent high-priority initiatives


Challenges, Actions, and Benefits


Sales and Marketing

■ Identify prospects and opportunities.

■ Target marketing communications. ■ Deliver sales pitch. ■ Offer disclosures. ■ Price products and services competitively.

Service Management

■ Develop a full view of client relationships.

■ Deliver effective communications. ■ Improve product/service with customer insight.

■ Enable self-service through digital channels.

Client Onboarding

■ Document management ■ Evaluate customer risk (credit, KYC, AML, etc.).

■ Entitlements, program managers ■ Training, communications, go live ■ Straight through experience with minimal cycle time

Product Delivery

■ Provide uninterrupted service. ■ Ensure consistent quality of the channel experience

■ Handle disputes and exceptions. ■ Deliver on customer expectations.


KEY INTERACTION POINTSCustomer Relationship Life-Cycle

Client Life-Cycle


n = 132.

Source: CEB 2011 Client Experience Survey.

IMPORTANCE OF ONBOARDINGA Better Onboarding Experience Builds Client Loyalty in Wealth Management

Clie

nt L

oyal

ty

Client Rating of Their Initial Interactions with Their Firm ExcellentPoor

High

Low

Primary Importance: ■ Speed of Account Opening ■ Ease of Data Collection ■ Welcome Call or Letter from Senior


MISSING THE OPPORTUNITY TO EXCELPercentage of Wealth Clients Rating Each Stage as Excellent

n = 754.

Source: CEB 2011 HNW Client Experience Survey.

n = 30.

Source: CEB 2013 Customer Experience Survey.

Sales and Onboarding Experience

Financial Planning Experience

Annual Review Experience

0%

25%

50%

31%36%

42%

Percentage Who Tried and Failed to Open an Account Online

The Bank Had to Send Me

Paperwork to Sign

I Had to Call Customer Service

to Activate My Account

I Had to Go to the Branch to Sign

Paperwork

The Account Could Not Be Opened

Immediately

The Process Was Confusing or Did

Not Work

0%

35%

70%

0%

35%

70%

70% 67% 58% 52%40%

70%

0%

35%

70%

40%52%58%67%


CHALLENGES OF ONBOARDINGDisparate Onboarding Technologies


Applicant New Customer

Enterprise Content Management

Electronic Signature

Compliance (KYC, AML, Fraud)

Customer Relationship Management

Front-End Channel Platform

Challenges

■ Disjointed Systems ■ Manual Processes ■ Multiple Data Entry

■ Missing/Omitted Data ■ Errors and Exceptions ■ Compliance Risk

■ Long Onboarding Time ■ Customer Dissatisfaction ■ Slow Product Utilization


ONBOARDING STP AN AMBITIONThe Best Practitioners Remain Only Partially Automated

Partially Automated Systems and Consistently Applied Across Products

Partially Automated Systems with Di�erent

Technology Across Products

Remain Mostly Manual

0%

25%

50%

42% 42%

16%

n = 24.

Source: CEB 2013 Onboarding Survey.

Best Practitioners


MORE IT COORDINATION REQUIREDMore Than 42% of the Banks Access at Least 10 Systems During Onboarding…

Less Than 5

Less Than 10% of Systems Integrated

5–9

10%–25%

10–14

26%–50%

More Than 20

51%–75%

n = 24.


n = 24.


…But Optimizing Through Automation Remains an Ambition

0%

25%

50%

0%

25%

50%

33% 30% 33%

4%

Number of Systems

Most banks have fewer than 25% of onboarding systems integrated.

0%

25%

50%

0%

25%

50%

13%

45%

29%

13%


CONSEQUENCES OF MANUAL WORKPercentage of Executives Selecting Top Negative Consequences of Manual Work

n = 58.

Source: CEB 2012 FS Operations Leadership Council Automation Survey.

Ability to Drive Efficiency

Ability to Respond to Change

Ability to Meet Customer Demand

Ability to Manage Risk

Ability to Keep Up with Competitors

0% 50% 100%

88%

69%

62%

57%

53%


IMPROVE HIGH-IMPACT ELEMENTSOrchestrating and Automating Onboarding

Applicant

Front-End Channel Platform

Business Process Management Orchestration Layer

Core System/CIS

Customer Relationship Management

Electronic Signature

Enterprise Content

Management

Security and Compliance

Accept common data from any platform

Triggers automated workflow:

■ Import data to point systems

■ Coordinate and execute tasks

■ Process results ■ Accept/reject ■ Export to core system



FASTER INCOME REALIZATIONImprovement in Product Utilization Time After Onboarding Automation

n = 24.


Over 75%

51% to 75%

26% to 50%

10% to 25%

Less Than 10%

0% 15% 30%

17%

20%

29%

17%

17%

Imp

rove

men

t Ti

me


AUTOMATION WIDENS MARGINSTop Performers in AutomationExpense to Revenue Growth Ratios

n = 27.

Source: CEB 2012 Hidden Inefficiencies Survey.

0.00

0.50

1.00

1.50

0.51

1.04

Expenses Grow 50% Faster Relative to Revenue Growth

Expenses Grow 50% Slower Relative to

Revenue Growth

Expense Growth Rate Equals

Revenue Growth

Top Performers Others

Expenses grow 49% slower relative to revenue growth.

Expenses grow 4% faster relative to revenue growth.


SATISFIED CLIENTS DELIVER VALUENew Clients Who Recommended Their Firm by Rating of Initial Interactions

n = 754.

Source: CEB 2011 Client Experience Survey.

Fair to Good Very Good Excellent0%

40%

80%

33%

48%

63%


Case Review


MANUAL PROCESSES DOMINATEDSample Workflow of Client Onboarding Pre-Automation

Initial Meeting

Paper Documents

Administrative Review

Compliance Review

Manual Data Entry

Advisor

Client

■ Advisor focused on gathering data

■ Less fluid interaction with client

■ All forms were paper based.

■ Sent to centralized processing center

■ Must wait more than three days to process

■ Reviews often found errors.

■ Would return to advisor/client to complete

■ KYC reviews often found missing or incomplete data.

■ Would return to advisor/client to complete

■ Completed and checked forms are manually entered into the master file.

Source: ATB Investor Services; CEB analysis.


ESTABLISH AUTOMATION OBJECTIVES Targeted High-Impact Improvement Zones

User Experience Operational Efficiency

Risk Management

■ Improve client experience.

■ Improve advisor experience.

■ Improve process efficiencies.

■ Reduce the time to open and maintain accounts.

■ Reduce costs.

■ Enhance compliance.

■ Reduce errors.

■ Reduce off-site storage of client/account documentation.



INITIATE E-DOCUMENTS The First Phase Targeted Obvious Manual Events

Customer Data Captured Electronically

■ KYC data ■ Investment profile

Printed Account Agreement Forms

■ Pre-populated with electronic data

■ Barcoded for tracking ■ Upload to PDF and store electronically

Send to ReviewData and forms

sent electronically



CLIENT CARE GROUP Phase 2: Central Advisor Support During Onboarding

Client

Advisor

Client Care Group (CCG): Specialized group of individuals who are available to assist financial advisors and their financial advisor associates with completing various administrative processes and tasks

Client Care Representative ■ Flexible aid to advisor ■ Can be videoconferenced into meeting

■ Handles tasks such as taking notes, client info, and other details

■ Lets advisor focus on investment conversation



CONTINUOUS IMPROVEMENTE-Signatures Client Portals

Objectives

Increase user experience through the client channel with better functionality and layout.

■ Electronic communications: statements, confirmations

■ View portfolio positions. ■ View past transactions; download them to spreadsheet or money management software.

Objectives

Identify the viability of using technology to enable users to send, receive, and/or sign files electronically.

■ Internally: Associates > Associates ■ Externally: Associates > Clients



RECOMMENDATIONS

Technology Providers

■ Work with FIs to improve their understanding of how your current technology solutions help simplify and improve their client experience.

■ Collaborate with your partners and prospects by using cases with high-impact results and determining key metrics for meeting their objectives.


Financial Institutions

■ Prioritize your client relationship initiative(s) based on highest-impact interaction point(s) in the relationship life cycle.

■ Conduct end-to-end process reviews utilizing BPM expertise to achieve the greatest enterprise scale, regardless of initial implementation goals.

■ Work toward both the standardization of agreements, as well as the adoption of electronic documents, for greater automation efficiency.

■ Revisit current automated initiatives to identify missed opportunities for greater scale and elimination of systems redundancy.

■ Capitalize on executive management’s level of awareness to gain leverage for investment.